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95-463: A new company, Crédit Mobilier of America, was created by Union Pacific executives to actually build the line, but at inflated construction costs. Though the railroad cost only $ 50 million to build, Crédit Mobilier billed $ 94 million and Union Pacific executives pocketed the excess $ 44 million. Part of the excess cash and $ 9 million in discounted stock was then used to bribe several Washington politicians for laws, funding, and regulatory rulings favorable to

190-568: A business enterprise, covering its operating expenses with freight and passenger revenues while providing profits for investors and interest payments to the US government for the borrowed capital (at the federal rate based upon the U.S. government bond rates), and ultimately retiring its debt to the U.S. government. Opponents of the Pacific Railroad Acts felt the construction and its routing were being developed without regard for creating

285-474: A cash profit of only $ 23,366,319.81, a financial misrepresentation since these same directors were the recipients of the undisclosed $ 20,563,010 Union Pacific share of the total profits. Maury Klein, in his wide-ranging analysis of the scandal boils down the issue: "Did the builders of the road defraud the government? And did they attempt to gain influence in Congress through bribery? The evidence suggested that

380-510: A designated period in American history. The term was adopted by literary and cultural critics as well as historians, including Van Wyck Brooks , Lewis Mumford , Charles Austin Beard , Mary Ritter Beard , Vernon Louis Parrington , and Matthew Josephson . For them, Gilded Age was a pejorative term for a time of materialistic excesses and widespread political corruption. The early half of

475-463: A gain of 48%. Economic historian Clarence D. Long estimates that (in terms of constant 1914 dollars), the average annual incomes of all American non-farm employees rose from $ 375 in 1870 to $ 395 in 1880, $ 519 in 1890 and $ 573 in 1900, a gain of 53% in 30 years. Australian historian Peter Shergold found that the standard of living for industrial workers was higher than in Europe. He compared wages and

570-564: A great communications network. Elisha Otis developed the elevator, allowing the construction of skyscrapers and the concentration of ever greater populations in urban centers. Thomas Edison , in addition to inventing hundreds of devices, established the first electrical lighting utility, basing it on direct current and an efficient incandescent lamp . Electric power delivery spread rapidly across Gilded Age cities. The streets were lit at night, and electric streetcars allowed for faster commuting to work and easier shopping. Petroleum launched

665-729: A large fortune. He was influential in the establishment of the Republican Party in Massachusetts. In 1860, he became a member of the executive council of Massachusetts, and from 1863 to 1873 he served in Congress as a U.S. Representative for the Second District of Massachusetts. While there, he became a member of the Committee on Railroads during the early building of the transcontinental railroad. In 1865, President Abraham Lincoln appealed to him to take control of

760-415: A lifetime career for young men; women were rarely hired. A typical career path would see a young man hired at age 18 as a shop laborer and promoted to skilled mechanic at age 24, brakeman at 25, freight conductor at 27, and passenger conductor at age 57. White-collar career paths likewise were delineated. Educated young men started in clerical or statistical work and moved up to station agents or bureaucrats at

855-628: A long-distance outlet for wheat, cattle and hogs that reached all the way to Europe. Rural America became one giant market, as wholesalers bought the consumer products produced by the factories in the East and shipped them to local merchants in small stores nationwide. Shipping live animals was slow and expensive. It was more efficient to slaughter them in major packing centers such as Chicago, Kansas City, St. Louis, Milwaukee, and Cincinnati, and then ship dressed meat out in refrigerated freight cars. The cars were cooled by slabs of ice that had been harvested from

950-485: A new industry beginning with the Pennsylvania oil fields in the 1860s. The United States dominated the global industry into the 1950s. Kerosene replaced whale oil and candles for lighting homes. John D. Rockefeller founded Standard Oil Company and monopolized the oil industry. It mostly produced kerosene before the automobile created a demand for gasoline in the 20th century. According to historian Henry Adams

1045-508: A new middle class was rapidly growing, especially in northern cities. The nation became a world leader in applied technology. From 1860 to 1890, 500,000 patents were issued for new inventions—over ten times the number granted in the previous seventy years. George Westinghouse invented air brakes for trains (making them both safer and faster). Theodore Vail established the American Telephone & Telegraph Company and built

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1140-503: A number of projects for the Ames family) with sculpted plaques of the Ames brothers by Augustus Saint-Gaudens . At the time of its construction, the monument was located at the highest point attained by the UP's transcontinental route. With a change in the route of the railroad, the monument today is not on any major transportation route. The city of Ames , Iowa is named for Oakes, as is likely

1235-580: A partner in the business, and with his brother Oliver Ames Jr. he established the firm Oliver Ames & Sons. Driven by the settlement of the Midwest , by the discovery of gold in California and Australia, as well as by railroad construction, the shovel manufacturing business boomed. During the Civil War , the firm prospered with contracts for swords, shovels, and other tools and implements. Ames made

1330-761: A peak membership in 1919. This period saw several financial crises and economic recessions—called "panics", notably the Panic of 1873 and the Panic of 1893 . They lasted several years, with high urban unemployment, low incomes for farmers, low profits for business, slow overall growth, and reduced immigration. They generated political unrest. Gilded Age politics, called the Third Party System, featured intense competition between two major parties, with minor parties coming and going, especially on issues of concern to prohibitionists, to labor unions and to farmers. The Democrats and Republicans (the latter nicknamed

1425-462: A probe that led to the censure of Oakes Ames and James Brooks , a Democrat from New York. During the 1872 campaign, Grant's running mate Henry Wilson initially denied involvement. However, in the February 1873 Senate investigation, Wilson admitted involvement and provided a complicated explanation claiming he had paid for stock in his wife's name, and with her money but had never taken possession of

1520-475: A profitable company. Following a disagreement with Ames, Henry Simpson McComb leaked compromising letters to The New York Sun , a reformist newspaper highly critical of incumbent President Ulysses S. Grant and his administration. On September 4, 1872, the Sun broke the story. The newspaper reported that Crédit Mobilier had received $ 72 million in contracts for building a railroad worth only $ 53 million. After

1615-573: A viable and profitable transportation enterprise. They believed the whole project was a bare-faced fraud by some capitalists to build a "railroad to nowhere" and to make tremendous profits doing so, while getting the United States government to bear the costs. George Francis Train and Thomas C. Durant , the vice president of the Union Pacific Rail Road , formed Crédit Mobilier of America in 1864. Crédit Mobilier of America

1710-555: A year, which kept them mired in poverty. Workers had to put in roughly 60 hours a week to earn this much. Wage labor was widely condemned as 'wage slavery' in the working class press, and labor leaders almost always used the phrase in their speeches. As the shift towards wage labor gained momentum, working class organizations became more militant in their efforts to "strike down the whole system of wages for labor." In 1886, economist and New York Mayoral candidate Henry George , author of Progress and Poverty , stated "Chattel slavery

1805-512: Is dead, but industrial slavery remains." The unequal distribution of wealth remained high during this period. From 1860 to 1900, the wealthiest 2% of American households owned more than a third of the nation's wealth, while the top 10% owned roughly three-quarters of it. The bottom 40% had no wealth at all. In terms of property, the wealthiest 1% owned 51%, while the bottom 44% claimed 1.1%. Historian Howard Zinn argues that this disparity along with precarious working and living conditions for

1900-542: Is generally given as the beginning of the Progressive Era in the 1890s (sometimes the United States presidential election of 1896 ). The Gilded Age was a period of economic growth as the United States jumped to the lead in industrialization ahead of Britain. The nation was rapidly expanding its economy into new areas, especially heavy industry like factories, railroads , and coal mining . In 1869,

1995-631: The Reconstruction Era and the Progressive Era . It was named by 1920s historians after an 1873 Mark Twain novel . Historians saw late 19th-century economic expansion as a time of materialistic excesses marked by widespread political corruption. It was a time of rapid economic growth, especially in the Northern and Western United States. As American wages grew much higher than those in Europe, especially for skilled workers, and industrialization demanded an increasingly skilled labor force,

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2090-611: The economic depression of the 1870s and became known as the Great Railroad Strike of 1877 , which was, according to historian Jack Beatty , "the largest strike anywhere in the world in the 19th century." This strike did not involve labor unions, but rather uncoordinated outbursts in numerous cities. The strike and associated riots lasted 45 days and resulted in the deaths of several hundred participants (no police or soldiers were killed), several hundred more injuries, and millions in damages to railroad property. The unrest

2185-472: The eight-hour working day , and the abolition of child labor ; middle-class reformers demanded civil service reform, prohibition of liquor and beer, and women's suffrage . Local governments across the North and West built public schools chiefly at the elementary level; public high schools started to emerge. The numerous religious denominations were growing in membership and wealth, with Catholicism becoming

2280-468: The first transcontinental railroad opened up the far-west mining and ranching regions. Travel from New York to San Francisco then took six days instead of six months. Railroad track mileage tripled from 1860 to 1880, and then doubled again by 1920. The new track linked formerly isolated areas with larger markets and allowed for the rise of commercial farming, ranching, and mining, creating a truly national marketplace. American steel production rose to surpass

2375-520: The market value , which was much higher due to its superb (but fraudulent) profits and exclusive contract with the Union Pacific Railroad. It also declared substantial quarterly dividends on its stock. Those allowed to purchase shares at par value could reap enormous capital gains simply by offering these discounted shares on the market, knowing that they would be purchased at a higher price by investors desiring to own stock in such

2470-492: The "Grand Old Party", GOP) fought over control of offices, which were the rewards for party activists, as well as over major economic issues. Very high voter turnout typically exceeded 80% or even 90% in some Northern states as the parties ran strong campaigns. Turnout in the South was lower. Average presidential turnout 1872 to 1900 was 83% in the North and 62% in the South. Competition was intense and elections were very close. In

2565-435: The California border. Nor were there any branch lines running either north or south of the proposed route that would have been able to feed their traffic to a new transcontinental railway. As a result, private investors refused to invest. In spite of this, the entire railroad scheme was proposed as a " going concern " – a financially viable enterprise that relied on "below-market" financing and then could continue to function as

2660-521: The Democrats and Republicans. Gilded age politicians are somewhat infamous among historians for having few actual policies and doing very little of importance in office. Gilded age presidents are frequently called the "forgotten presidents" because of their mediocre presidencies where they did very little. The major metropolitan centers underwent rapid population growth and as a result had many lucrative contracts and jobs to award. To take advantage of

2755-744: The Gilded Age roughly coincided with the middle portion of the Victorian Era in Britain and the Belle Époque in France. With respect to eras of American history, historical views vary as to when the Gilded Age began, ranging from starting right after the Civil War ended in 1865, or 1873, or as the Reconstruction Era ended in 1877. The date marking the end of the Gilded Age also varies. The ending

2850-503: The Knights claimed 700,000 members. By 1890, membership had plummeted to fewer than 100,000, then faded away. Strikes organized by labor unions became routine events by the 1880s as the gap between the rich and the poor widened. There were 37,000 strikes from 1881 to 1905. By far the largest number were in the building trades, followed far behind by coal miners. The main goal was control of working conditions and settling which rival union

2945-616: The Union Pacific (UP) portion of the project, which had become mired down because of the war, and had built only 12 miles (19 km) of track. Through his influence he obtained contracts for his family firm in the construction of the Union Pacific and staked nearly all the family's holdings as capitalization for the project. The contracts were later transferred to the Credit Mobilier Company of America after Ames ousted its founder Thomas Durant . His brother Oliver

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3040-400: The Union Pacific and Crédit Mobilier, the contract's terms, conditions, and price were offered and accepted through the actions of the same corporate officers and directors, operating on both sides of the contract. The underlying fraud of a common and unified ownership of two companies that shared principal officers and directors was not revealed for years. The principal means of the scheme was

3135-574: The Union Pacific. The scandal negatively affected the careers of many politicians and nearly bankrupted Union Pacific. For decades partisan newspapers used the scandal to create widespread public distrust of Republicans, Congress, and the federal government during the Gilded Age . The scandal's origins dated to 1864, when the Union Pacific Railroad was chartered by Congress and the associated corporation Crédit Mobilier of America

3230-410: The United States led the world. Kennedy reports that "U.S. national income, in absolute figures in per capita, was so far above everybody else's by 1914." Per capita income in the United States was $ 377 in 1914 compared to Britain in second place at $ 244, Germany at $ 184, France at $ 153, and Italy at $ 108, while Russia and Japan trailed far behind at $ 41 and $ 36. London remained the financial center of

3325-664: The West based on farming, ranching, and mining. Labor unions became increasingly important in the rapidly growing industrial cities. Two major nationwide depressions—the Panic of 1873 and the Panic of 1893 —interrupted growth and caused social and political upheavals. The South remained economically devastated after the American Civil War ; the region's economy became increasingly tied to commodities like food and building materials, cotton for thread and fabrics, and tobacco production, all of which suffered from low prices. With

3420-402: The affairs of a corporation in which he was interested, and whose interest directly depended upon the legislation of Congress, by inducing members of Congress to invest in the stocks of said corporation." Detractors referred to him as "Hoax Ames". Ames died soon afterward at North Easton, Massachusetts , May 5, 1873, due to a stroke. On May 10, 1883, the 14th anniversary of the completion of

3515-554: The agricultural and technical ("Ag & Tech") fields. Railroads, which had previously invented railroad time to standardize time zones, production, and lifestyles, created modern management, with clear chains of command, statistical reporting, and complex bureaucratic systems. They systematized the roles of middle managers and set up explicit career tracks for both skilled blue-collar jobs and for white-collar managers. These advances spread from railroads into finance, manufacturing, and trade. Together with rapid growth of small business,

3610-514: The answer to the first was no, and to the second a qualified yes." In 1867, Crédit Mobilier replaced Thomas Durant with Oakes Ames . Ames, a member of Congress, distributed cash bribes and discounted shares of Crédit Mobilier stock to fellow congressmen and other politicians in exchange for votes and actions favorable to the Union Pacific. Ames offered to members of Congress shares in Crédit Mobilier at its discounted par value rather than

3705-514: The book, whereby an increasingly complex set of rules dictated to everyone exactly what should be done in every circumstance, and exactly what their rank and pay would be. By the 1880s the career railroaders were retiring, and pension systems were invented to provide for them. America developed a love-hate relationship with railroads. Boosters in every city worked feverishly to make sure the railroad came through, knowing their urban dreams depended upon it. The mechanical size, scope, and efficiency of

3800-568: The combined totals of Britain, Germany, and France. Investors in London and Paris poured money into the railroads through the American financial market centered in Wall Street . By 1900, the process of economic concentration had extended into most branches of industry—a few large corporations, called " trusts ", dominated in steel, oil, sugar, meat, and farm machinery. Through vertical integration these trusts were able to control each aspect of

3895-437: The competitive sectors. Increased mechanization of industry is a major mark of the Gilded Age's search for cheaper ways to create more product. Frederick Winslow Taylor observed that worker efficiency in steel could be improved through the use of very close observations with a stop watch to eliminate wasted effort. Mechanization made some factories an assemblage of unskilled laborers performing simple and repetitive tasks under

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3990-486: The direction of skilled foremen and engineers. Machine shops grew rapidly, and they comprised highly skilled workers and engineers. Both the number of unskilled and skilled workers increased, as their wage rates grew. Engineering colleges were established to feed the enormous demand for expertise, many through the Federal government sponsored Morrill Land-Grant Acts passed to stimulate public education, particularly in

4085-404: The divisional or central headquarters. At each level they had more and more knowledge, experience, and human capital . They were very hard to replace and were virtually guaranteed permanent jobs and provided with insurance and medical care. Hiring, firing, and wage rates were set not by foremen, but by central administrators, to minimize favoritism and personality conflicts. Everything was done by

4180-482: The end of the Reconstruction era in 1877 and the rise of Jim Crow laws , African American (more generally termed Black, referring to darker skin color) people in the South were stripped of political power and voting rights, and were left severely economically disadvantaged. The political landscape was notable in that despite rampant corruption, election turnout was comparatively high among all classes (though

4275-424: The era by 1920s historians who took the term from one of Mark Twain 's lesser-known novels, The Gilded Age: A Tale of Today (1873). The book (co-written with Charles Dudley Warner ) satirized the promised " golden age " after the Civil War, portrayed as an era of serious social problems masked by a thin gold gilding of economic expansion. In the 1920s, and 1930s, the metaphor "Gilded Age" began to be applied to

4370-463: The era, the bottom 25% owned 0.32% of the wealth while the top 0.1% owned 9.4%, which would mean the period had the lowest wealth gap in recorded history. He attributes this to the lack of government interference. There was a significant human cost attached to this period of economic growth, as American industry had the highest rate of accidents in the world. In 1889, railroads employed 704,000 men, of whom 20,000 were injured and 1,972 were killed on

4465-880: The expense of the working class, by chicanery and a betrayal of democracy. Their admirers argued that they were "Captains of Industry" who built the core America industrial economy and also the non-profit sector through acts of philanthropy. For instance, Andrew Carnegie donated over 90% of his wealth and said that philanthropy was their duty—the " Gospel of Wealth ". Private money endowed thousands of colleges, hospitals, museums, academies, schools, opera houses, public libraries, and charities. John D. Rockefeller donated over $ 500 million to various charities, slightly over half his entire net worth. Reflecting this, many business leaders were influenced by Herbert Spencer 's theory of social Darwinism , which justified laissez-faire capitalism, competition and social stratification . This emerging industrial economy quickly expanded to meet

4560-486: The extent of the franchise was generally limited to men), and national elections featured two similarly sized parties. The dominant issues were cultural (especially regarding prohibition , education, and ethnic or racial groups) and economic (tariffs and money supply). Urban politics were tied to rapidly growing industrial cities, which increasingly fell under control of political machines . In business, powerful nationwide trusts formed in some industries. Unions crusaded for

4655-741: The job. The U.S. was also the only industrial power to have no workman's compensation program in place to support injured workers. Craft-oriented labor unions, such as carpenters, printers, shoemakers and cigar makers, grew steadily in the industrial cities after 1870. These unions used frequent short strikes as a method to attain control over the labor market and fight off competing unions. They generally blocked women, blacks, and Chinese from union membership, but welcomed most European immigrants. The railroads had their own separate unions. An especially large episode of unrest (estimated at eighty thousand railroad workers and several hundred thousand other Americans, both employed and unemployed) broke out during

4750-399: The largest. They all expanded their missionary activity to the world arena. Catholics, Lutherans , and Episcopalians set up religious schools, and the largest of those schools set up numerous colleges, hospitals, and charities. Many of the problems faced by society, especially the poor, gave rise to attempted reforms in the subsequent Progressive Era . The term Gilded Age was applied to

4845-689: The local factory owner who could patrol every part of his own factory in a matter of hours. Civil engineers became the senior management of railroads. The leading innovators were the Western Railroad of Massachusetts and the Baltimore and Ohio Railroad in the 1840s, the Erie in the 1850s, and the Pennsylvania in the 1860s. The railroads invented the career path in the private sector for both blue- and white-collar workers. Railroading became

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4940-445: The method of indirect billing. The Union Pacific presented genuine and accurate invoices to the U.S. government as evidence of actual construction costs billed to them by Crédit Mobilier of America for payment. Any audit of the Union Pacific invoices to the government would have revealed no evidence of fraud or profiteering, because the fraud took place one level deeper, on the invoices from Crédit Mobilier to Union Pacific. Union Pacific

5035-559: The most hated railroad men in the country was Collis P. Huntington (1821–1900), the president of the Southern Pacific Railroad , who dominated California's economy and politics. One textbook argues: "Huntington came to symbolize the greed and corruption of late-nineteenth-century business. Business rivals and political reformers accused him of every conceivable evil. Journalists and cartoonists made their reputations by pillorying him.... Historians have cast Huntington as

5130-502: The natural resources and virgin lands that were available in America acted as a safety valve for poorer workers, hence, employers had to pay higher wages to hire labor. According to Shergold the American advantage grew over time from 1890 to 1914, and the perceived higher American wage led to a heavy steady flow of skilled workers from Britain to industrial America. According to historian Steve Fraser, workers generally earned less than $ 800

5225-400: The new economic opportunity, both parties built so-called " political machines " to manage elections, to reward supporters and to pay off potential opponents. Financed by the " spoils system ", the winning party distributed most local, state and national government jobs, and many government contracts, to its loyal supporters. Oakes Ames Oakes Ames (January 10, 1804 – May 8, 1873)

5320-560: The new market demands. From 1869 to 1879, the U.S. economy grew at a rate of 6.8% for NNP (GDP minus capital depreciation) and 4.5% for NNP per capita. The economy repeated this period of growth in the 1880s, in which the wealth of the nation grew at an annual rate of 3.8%, while the GDP was also doubled. Libertarian economist Milton Friedman states that for the 1880s, "The highest decadal rate [of growth of real reproducible, tangible wealth per head from 1805 to 1950] for periods of about ten years

5415-399: The northern lakes in wintertime and stored for summer and fall usage. Chicago, the main railroad center, benefited enormously, with Kansas City a distant second. Historian William Cronon concludes: During the 1870s and 1880s, the U.S. economy rose at the fastest rate in its history, with real wages, wealth, GDP, and capital formation all increasing rapidly. For example, from 1865 to 1898,

5510-438: The opponents of the railroad project from the start. The Union Pacific paid $ 94,650,287 to Crédit Mobilier via the project, while Crédit Mobilier incurred operating costs of only $ 50,720,959. Thus, the deal generated $ 43,929,328 (equivalent to over $ 724.9M in 2020) in profits for Crédit Mobilier, counting the Union Pacific shares and bonds that Crédit Mobilier bought and paid itself. The Crédit Mobilier directors reported this as

5605-413: The output of wheat increased by 256%, corn by 222%, coal by 800%, and miles of railway track by 567%. Thick national networks for transportation and communication were created. The corporation became the dominant form of business organization, and a scientific management revolution transformed business operations. By the beginning of the 20th century, gross domestic product and industrial production in

5700-406: The period saw an influx of millions of European immigrants. The rapid expansion of industrialization led to real wage growth of 40% from 1860 to 1890 and spread across the increasing labor force. The average annual wage per industrial worker (including men, women, and children) rose from $ 380 in 1880 ($ 11,998 in 2023 dollars ) to $ 584 in 1890 ($ 19,126 in 2023 dollars ), a gain of 59%. The Gilded Age

5795-405: The policemen dispersing a meeting. Police then randomly fired into the crowd, killing and wounding a number of people, including other police, and arbitrarily rounded up anarchists, including leaders of the movement. Seven anarchists went on trial; four were hanged even though no evidence directly linked them to the bombing. One had in his possession a Knights of Labor membership card. At its peak,

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5890-427: The production of a specific good, ensuring that the profits made on the finished product were maximized and prices minimized, and by controlling access to the raw materials, prevented other companies from being able to compete in the marketplace. Several monopolies—most famously Standard Oil —came to dominate their markets by keeping prices low when competitors appeared; they grew at a rate four times faster than that of

5985-693: The project, as opposed to the operating phase, to generate profit. Because the conspirators believed they could not expect conventional profits from the operation of the railroad, they created the sham company so they could charge the U.S. government extortionate fees and expenses during the construction phase. In simplified terms, the scheme worked as follows: The directors of the Union Pacific also engaged in stock manipulation circumventing requirements that they receive full payment for stock issued at par by instead paying Crédit Mobilier in bank checks, which Crédit Mobilier then used to purchase Union Pacific stock. In every major construction contract drawn up between

6080-506: The railroad with a loan of $ 16,000 to $ 48,000 per mile of track, variable according to location, for a total of more than $ 60 million in all, and a land grant of 20,000,000 acres (8,100,000 ha), worth $ 50 to $ 100 million. The offer initially attracted no subscribers for additional financing, as the conditions were financially daunting. The railroad would have to be built for 1,750 miles (2,820 km) through desert and mountains, incurring extremely high freight costs for supplies. There

6175-541: The railroad's construction company. Ames was born in Easton, Massachusetts , the son of Susanna (Angier) Ames and Oliver Ames Sr. , a blacksmith who had built a business of making shovels, the Ames Shovel Shop , and became nicknamed "King of Spades". In his youth, he obtained a public school education and later worked in the family workshops to learn each step of the manufacturing process. He eventually became

6270-521: The railroad, the state legislature of Massachusetts passed a resolution exonerating Ames. His son Oliver Ames served as Governor from 1887 to 1890. The contributions of Ames and his brother Oliver in the building of the Union Pacific are commemorated in the Oliver and Oakes Ames Monument at Sherman Summit, near Laramie, Wyoming , along the original route. The pyramidal monument was designed by famous architect Henry Hobson Richardson (who designed

6365-403: The railroads made a profound impression; people dressed in their Sunday best to go down to the terminal to watch the train come in. Travel became much easier, cheaper, and more common. Shoppers from small towns could make day trips to big city stores. Hotels, resorts, and tourist attractions were built to accommodate the demand. The realization that anyone could buy a ticket for a thousand-mile trip

6460-438: The revelations, the Union Pacific and other investors were left nearly bankrupt . In 1872, the (Republican) House of Representatives submitted the names of nine politicians to the (Republican) Senate for investigation: All of those named were Republicans except Bayard, a Democrat who was largely dropped from the investigation after he wrote a letter disavowing any knowledge. Ultimately, Congress investigated 13 of its members in

6555-466: The shares. According to Wilson, when his wife (and later he himself) had concerns about the transaction, the transaction was reversed. Wilson's wife had died in 1870, so senators had to rely on Wilson's word and that of Ames, whose account corroborated Wilson's. The Senate accepted Wilson's explanation, and took no action against him, but his reputation for integrity was somewhat damaged because of his initial denial. Senator Henry L. Dawes of Massachusetts

6650-491: The solution. The AFL was a coalition of unions, each based on strong local chapters; the AFL coordinated their work in cities and prevented jurisdictional battles. Gompers repudiated socialism and abandoned the violent nature of the earlier unions. The AFL worked to control the local labor market, thereby empowering its locals to obtain higher wages and more control over hiring. As a result, the AFL unions spread to most cities, reaching

6745-498: The southern states, lingering resentment over the Civil War remained and meant that much of the South would vote Democratic. After the end of Reconstruction in 1877, competition in the South took place mainly inside the Democratic Party. Nationwide, turnout fell sharply after 1900. Despite the high voter turnout, aggressive political campaigning, and frequently nasty elections, there were few real policy differences between

6840-546: The standard of living in Pittsburgh with Birmingham, England, one of the richest industrial cities of Europe. After taking account of the cost of living (which was 65% higher in the U.S.), he found the standard of living of unskilled workers was about the same in the two cities, while skilled workers in Pittsburgh had about 50% to 100% higher standard of living as those in Birmingham, England. Warren B. Catlin proposed that

6935-418: The state's most despicable villain." However Huntington defended himself: "The motives back of my actions have been honest ones and the results have redounded far more to the benefit of California than they have to my own." The growth of railroads from 1850s to 1880s made commercial farming much more feasible and profitable. Millions of acres were opened to settlement once the railroad was nearby, and provided

7030-448: The system of railroads needed: The impact can be examined through five aspects: shipping, finance, management, careers, and popular reaction. Railroads provided a highly efficient network for shipping freight and passengers throughout the U.S., spurring the evolution of a large national market. This had a transformative impact on most sectors of the economy including manufacturing, retail and wholesale, agriculture, and finance. The result

7125-451: The working classes prompted the rise of populist , anarchist , and socialist movements. French economist Thomas Piketty notes that economists during this time, such as Willford I. King , were concerned that the United States was becoming increasingly inegalitarian to the point of becoming like old Europe, and "further and further away from its original pioneering ideal." According to economist Richard Sutch in an alternative view of

7220-935: The world until 1914, yet the United States' growth caused foreigners to ask, as British author W. T. Stead wrote in 1901, "What is the secret of American success?" The businessmen of the Second Industrial Revolution created industrial towns and cities in the Northeast with new factories, and hired an ethnically diverse industrial working class, many of them new immigrants from Europe. Wealthy industrialists and financiers such as John D. Rockefeller , Jay Gould , Henry Clay Frick , Andrew Mellon , Andrew Carnegie , Henry Flagler , Henry Huttleston Rogers , J. P. Morgan , Leland Stanford , Meyer Guggenheim , Jacob Schiff , Charles Crocker , and Cornelius Vanderbilt would sometimes be labeled " robber barons " by their critics, who argue their fortunes were made at

7315-489: Was $ 1.8 billion; 1897, it reached $ 10.6 billion (compared to a total national debt of $ 1.2 billion). Funding came primarily from private finance throughout the Northeast, and from Europe, especially Britain, with about 10 percent coming from the Federal government, especially in the form of land grants that could be realized when a certain amount of trackage was opened. The emerging American financial system

7410-422: Was a deliberate façade. Train and Durant aimed to present to both the government and to the public the appearance that an independent corporate enterprise had been impartially chosen as the principal contractor and construction management firm for the project. In fact, Crédit Mobilier was created to shield the company's shareholders and management from the common charge that they were using the construction phase of

7505-416: Was accepting for payment genuine Crédit Mobilier invoices (based on fraudulent accounting) and was applying only an overhead expense for management and administration. If the Union Pacific's corporate officers had openly undertaken the management and construction of the railroad, this scheme to make windfall profits immediately from charges made during construction would have been exposed to public scrutiny by

7600-486: Was also a dark side. By the 1870s railroads were vilified by Western farmers who absorbed the Granger movement theme that monopolistic carriers controlled too much pricing power, and that the state legislatures had to regulate maximum prices. Local merchants and shippers supported the demand and got some " Granger Laws " passed. Anti-railroad complaints were loudly repeated in late 19th century political rhetoric. One of

7695-489: Was also an era of poverty, especially in the South, and growing inequality, as millions of immigrants poured into the United States, and the high concentration of wealth became more visible and contentious. Railroads were the major growth industry, with the factory system, oil, mining, and finance increasing in importance. Immigration from Europe and the Eastern United States led to the rapid growth of

7790-406: Was also implicated. Dawes had purchased $ 1,000 in stock and had received a dividend. Dawes later had doubts about the propriety of the stock purchase and cancelled it. Ames returned the purchase price to Dawes with interest and Dawes returned the dividend to Ames. Dawes received $ 100 in interest on his returned purchase price, but he was not further implicated. A Department of Justice investigation

7885-401: Was also made with Aaron F. Perry as chief counsel. During the investigation, the government found that the company had given shares to more than 30 politicians from both parties, including James A. Garfield , Colfax, Patterson, and Wilson. No charges were filed against any of the participants in the scandal. James A. Garfield denied the charges and was elected president in 1880. This scheme

7980-542: Was an American businessman, investor, and politician. He was a member of the United States House of Representatives from Massachusetts . As a congressman, he is credited by many historians as being the single most important influence in the building of the Union Pacific portion of the transcontinental railroad . He is also noted for the subsequent scandal that alleged the improper sale of stock of

8075-406: Was an integrated market practically the size of Europe's, with no internal barriers, tariffs, or language barriers to hamper it, and a common financial and legal system to support it. Railroad financing provided the basis for a dramatic expansion of the private financial system. Construction of railroads was far more expensive than factories. In 1860, the combined total of railroad stocks and bonds

8170-511: Was apparently reached in the eighties with approximately 3.8 percent." The rapid expansion of industrialization led to real wage growth of 60% from 1860 to 1890, spread across the increasing labor force. Real wages (adjusting for inflation) rose steadily, with the exact percentage increase depending on the dates and the specific work force. The Census Bureau reported in 1892, that the average annual wage per industrial worker (including men, women, and children) rose from $ 380 in 1880 to $ 564 in 1890,

8265-563: Was appointed president of the UP in 1866. The railroad was completed in 1869. In 1872, it was disclosed Ames sold shares in Credit Mobilier to fellow congressmen at a price greatly below the market value of the stock. The subsequent public scandal led to a House investigation, which formally recommended expulsion. On February 28, 1873, the House passed a resolution formally censuring Ames "in seeking to secure congressional attention to

8360-454: Was based on railroad bonds. By 1860, New York was the dominant financial market. The British invested heavily in railroads around the world, but nowhere more so than the United States; The total came to about $ 3 billion by 1914. In 1914–1917, they liquidated their American assets to pay for war supplies. Railroad management designed complex systems that could handle far more complicated simultaneous relationships than could be dreamed of by

8455-713: Was deemed severe enough by the government that President Rutherford B. Hayes intervened with federal troops. Starting in the mid-1880s a new group, the Knights of Labor , grew too rapidly, and it spun out of control and failed to handle the Great Southwest Railroad Strike of 1886 . The Knights avoided violence, but their reputation collapsed in the wake of the Haymarket Square Riot in Chicago in 1886 , when anarchists allegedly bombed

8550-696: Was empowering. Historians Gary Cross and Rick Szostak argue: The civil and mechanical engineers became model citizens, bringing their can-do spirit and their systematic work effort to all phases of the economy as well as local and national government. By 1910, major cities were building magnificent palatial railroad stations, such as the Pennsylvania Station in New York City, and the Union Station in Washington, D.C. But there

8645-529: Was established. This company had no relation to the major French bank Crédit Mobilier . In the Pacific Railroad Acts of 1864–68, Congress authorized and chartered the Union Pacific Railroad and provided $ 100 million (equivalent to over $ 1.6B in 2020) in capital investment to complete a transcontinental line west from the Missouri River to the Pacific coast . The federal government offered to assist

8740-420: Was in control. Most were of very short duration. In times of depression strikes were more violent but less successful, because the company was losing money anyway. They were successful in times of prosperity when the company was losing profits and wanted to settle quickly. The largest and most dramatic strike was the 1894 Pullman Strike , a coordinated effort to shut down the national railroad system. The strike

8835-438: Was led by the upstart American Railway Union led by Eugene V. Debs and was not supported by the established brotherhoods. The union defied federal court orders to stop blocking the mail trains, so President Cleveland used the U.S. Army to get the trains moving again. The ARU vanished and the traditional railroad brotherhoods survived but avoided strikes. The new American Federation of Labor , headed by Samuel Gompers , found

8930-520: Was referenced in the AMC television series Hell on Wheels , (broadcast during 2011-2016) with the portrayal of Thomas Durant. The scheme and scandal was proposed as a topic for a musical cabaret in season 10 of the FXX television series Archer . Gilded Age In United States history , the Gilded Age is described as the period from about the late 1870s to the late 1890s, which occurred between

9025-416: Was the high risk of armed conflict with hostile tribes of Native Americans , who occupied many territories in the interior, and no probable early business to pay dividends. There was no existing demand for railroad freight or passenger traffic for virtually the entire proposed route. Since no towns or cities of any size yet existed on the western prairies, there was no commercial activity between Nebraska and

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